Thomas G. Pownall, who popularized the "Pac-Man defense" in business circles when he daringly used it to ward off a legendary 1982 hostile...
Thomas G. Pownall, who popularized the “Pac-Man defense” in business circles when he daringly used it to ward off a legendary 1982 hostile takeover of his Martin Marietta, has died at age 83.
Mr. Pownall, the chief executive from 1982-88 of what is now Lockheed Martin, died Friday of pneumonia near his home in Potomac, Md.
Named for a popular video game featuring a circular icon that gobbled up its enemies, the Pac-Man defense emerged in the corporate-raider wars in spring 1982 with a thwarted struggle for Cities Service.
But the savvy, tough-as-nails Mr. Pownall perfected the novel technique — in which the takeover target turns the tables and gobbles up its predator firm before it can be consumed itself.
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What Forbes magazine described as the “comic-opera takeover battle of 1982” began that August when Bendix announced, in a letter from its chairman, William Agee, that it had bought a majority of Martin Marietta shares and planned to buy the rest at $43 each.
“His letter announcing the tender offer was a gun at my head,” Mr. Pownall, a former Navy officer, later told Time magazine.
Mr. Pownall, who had joined Martin Marietta in 1963 but had been in the chief executive’s chair for only four months, and his board were convinced that Bendix, an electronics company, knew nothing about operations of Martin Marietta, a Bethesda, Md.-based aerospace manufacturer. A takeover, they decided, would be bad.
Audaciously, Mr. Pownall enacted the Pac-Man defense by countering that his company would buy Bendix at $75 a share.
The strategy worked. Martin Marietta remained independent while Bendix was soon taken over by Allied.
Mr. Pownall demonstrated, New York takeover lawyer Dennis Hersch told the Los Angeles Times in 1982, that “you can use the defense, and even in the face of someone who’s already bought you, you can go out and buy them.”
The daring defensive maneuver spawned books, inspired the creation of courses in business schools and made Mr. Pownall something of a folk hero on Wall Street and beyond.
Adding Martin Marietta’s chairman title to his credits, Mr. Pownall quickly set about reducing the $1.3 billion debt incurred in the shootout. Within one year — rather than the 10 he first estimated — Martin Marietta had bought back all its shares from Allied.
He also restructured the company and spun off unprofitable operations — cement and industrial sand, chemicals and aluminum — and pursued more government aerospace contracts, greatly increasing Martin Marietta’s growth and profits.
The personable Mr. Pownall, who retired as chairman in 1988 but remained on the company’s board until 1991, was philosophical about his use of the Pac-Man defense.
“We cannot be construed to have been a winner,” he told Time magazine a year after the takeover battle, “but we have our dignity, and the character of the corporation is intact. We had a chance of being pushed over the cliff, and we are still on the cliff. It sure makes life sporty.”
As head of aerospace projects at Martin Marietta before becoming chief executive, Mr. Pownall supervised development of Viking spacecraft for the National Aeronautics and Space Administration’s first expedition to Mars in 1976, which remained one of his proudest achievements.
Born Jan. 20, 1922, in Cumberland, Md., Mr. Pownall graduated from the U.S. Naval Academy in 1946. He served as a Navy officer until resigning his commission in 1949, which he once told Forbes was “the greatest mistake I ever made.”
Before joining Martin Marietta, Mr. Pownall worked for the paper-box industry, a steel fabricator and an automobile manufacturer.
Mr. Pownall is survived by his wife of 59 years, Marilyn; two daughters, Suzi Locke and Fuzzy Billings; a sister, Molly Peters, and six grandchildren.